From The Art and Popular Culture Encyclopedia
The process includes locating a distributor to handle the film. For example, a film may be shown at a film festival or tradeshow in order to attract distributor attention, and if successful in that regard, may then be released through the distributor best meeting the owner's requirements and expectations for a profitable handling of the film, following a period of negotiation leading to a release contract.
The term "release" is sometimes confused with "distribution" because major studios distributed their own product and the separate legal step involved to formally release a film was simply a paper formality, not noticeable to the general public. Casually languaged major trade journals, such as Variety, have added to the confusion by using the terms interchangeably. The existence of the separate release process is usually most noticeable as regards foreign films, where an export and/or import company act to "release" the film for the production company of one country to a distributor in another, which may involve adding subtitles and preparing advertising compatible with the country in which a distributor is sought.